If you are looking forward to forming your Delaware LLC then you are in the right place. Here I have explained everything in easy 5 steps. As the LLC stands for Limited Liability Company, this company is recognized for complying with all the rules and regulations of the Delaware state. To form a legal LLC in Delaware, you will have to submit many documents and fill the forms and submit them to the Delaware SOS office.

There are many that you have to complete while forming an LLC in Delaware state. This guide is for those who want to form their own Delaware LLC on their own. According to the Delaware state, you will have to get many licenses and permits to operate the LLC legally. While forming the LLC you must keep in mind that you should form a foreign LLC it has more benefits than the domestic, as everything is explained further ahead in this guide.

Steps To Form Delaware LLC

The Delaware LLC Limited Liability Company is formed to preserve the personal assets of the business owners such as (Houses, cars, personal bank accounts, boats, aircraft, etc). If in any case the business does not grow and faces loss then it might announce bankruptcy. So in that case, all the personal assets of the owners are safe none of them are seized. So if you are willing to form an LLC in Delaware state then you must submit some documents and registration fees to the Delaware Department of State. To perform this task you have two possible ways as you can download the form complete the process and mail them. Or you can directly visit the Delaware SOS and submit the documents & $50 fees including the Certificate of Formation.

Step 1 – Delaware SOS (Name Search)

The first and the most relevant step for applying is to search/ keep a name for the Delaware LLC which is not currently used by someone else. To ensure that the name which you have selected is available or not you have to search the business database. If the name is available then it is relevant to reserve the entity name. To secure your rights to your name for 120 days, you must complete the name reservation form and pay the fees of $90. If you want to get started with the name search the go through our Delaware business entity search.

Naming Guidelines: As I mentioned earlier that you need to choose a name that goes with all the naming guidelines. I have mentioned some points down below you can check out if you want to know more points about them you can visit the official website of the Delaware State Department.

  • According to the naming guidelines of Delaware state, you must use the phrase “Limited Liability Company” or (LLC, L.L.C., LLP, LP). 
  • You must never include such words as FBI, state department, treasury, etc. As the words are only used by the government.
  • There are a few other words that you cannot use without you having appropriate licenses and permits. Attorney, Bank, University, Doctor, etc.

Name Availability: Once you have selected the name for your Delaware LLC then you will have to check whether the name is available or not. to check that you will have to visit the official Delaware SOS website and find the Business entity Search option. you will have to enter the name that you have selected click on proceed. A list will appear on the screen full of names, if you see the name on the list it is already taken by another entity. You will have to find a new name for LLC, when you find that the name is available then you can reverse it for your LLC.

Buy Domain: Buying a domain for your LLC is optional if you want to make your own website. Then you can buy a domain and grow your business by selling the products online. you must check the availability of the URL and if you find one then you must buy it for your future use. You can perform this task after you select a name for your Delaware LLC.

I Recommend you to select a name that is short and unique. You must have a simple name so that your clients can easily find your name when searching for your LLC. It is also recommended that you should select more names in the option so that if the first name is not available you can try for another name and thus by doing this your time will be saved.

Step 2 – Choose Your Registered Agent

To register your LLC in Delaware you need to select a registered agent for your LLC. The registered agent manages all the legal documents, lawsuits, taxation reports, income reports, notices, etc. They receive and submit all the documents on behalf of your Delaware LLC. They always keep your LLC up to date and manage all the licenses and permits to maintain your LLC.

Who Can Be Your Registered Agent in Delaware?

The registered agent you select must be a resident of Delaware state & he/she must know all the documents that you need to submit. All the processes that should be done while forming an LLC in Delaware. However, you can select from your family, friends, employees, or yourself.

I Recommend you to choose a professional registered agent. It is because if you choose one from your LLC or your family or friend they might not have all the state and federal knowledge. So if you choose a professional registered agent they will manage each situation as they are trained regarding all the situations.

Step 3 – File the Delaware LLC Certificate of Formation

As I mentioned earlier that you need to submit a Certificate of formation to register successfully. As the certificate ensures that the Delaware LLC is legally formed and maintained properly. While filing the form you must enter all the details that are mentioned below. If you need a more detailed step by step process to understand this, you may take a look at how I explained the Delaware certificate of formation.

  • Company’s name 
  • Registered office address
  • Name of the registered agent
  • Effective date the LLC plans to do business in Delaware
  • Additional matters 
  • Signature and the address
  • Authorized person’s signature
  • Printed/typed name of the authorized person

Now, after these steps, you have to start filing the necessary information into the form most applicable to your particular situation. Once you submit the information, you are required to print both the forms off, provide the requisite signature, and prepare the filing fee. You can pay the fees in three ways, either you can pay through the credit card, or else you can give the information of the card onto the cover letter, or else you can make a cheque made payable to the Delaware secretary of the state. As soon as you complete this you have to mail the filing package to the address stated below. 

Submit In-Person Or Mail to:

  • Delaware Division of Corporations
    401 Federal Street
    Suite 4
    Dover, DE 19901
I Recommend filing the certification of formation online as it is one of the faster ways to complete your work. It is one of the best options for you as it can be done from anywhere, whether you are there in the state or not. It will consume less time as compared to that of mail and in-person filing.

Step 4 – Create Your Operating Agreement

Having an operating agreement is a highly important aspect to form your LLC. While it is not required by the state of Delaware, Assuming an operating agreement helps in establishing the duties and duties of all the entity’s manager/members are. It serves as a guideline for how the entity is to obtain, more or less. An operating agreement will contain all the necessary details regarding the company, its member, its management, the share of each member, capital raised by each member, and the rules and regulations. From a point of view of future aspects, it is one of the most important things that you should have for your Delaware LLC. I have specifically made an operating agreement guide for you to check out.

I recommend creating an operating agreement although it is not necessary by the state. As it is a document that will contain each and everything about the company, its members, share of the members and capital, and rules and regulations about the company. It is an important document from a point of view of future aspects.

Step 5 – Get Your Delaware LLC EIN

As I all know that if you are a resident of the United States you must have a Social security number issued. So Similarly you must register your LLC for the EIN (Employer Identification Number). It is necessary if you want to form a Delaware LLC. The EIN is issued from the Internal Revenue Services official website. you can visit and provide all the documents to obtain the EIN for your LLC. If you are looking to get your EIN for free you could take a look here.

  • If you are looking forward to opening a business bank account for your LLC then you must require EIN.
  • The EIN is also required when you provide income proof to IRS for managing the federal and state laws.
  • If you want to recruit new employees then also you will require the Employer Identification Number.
I Recommend you to get the EIN as soon as possible after completing filing for your certificate of formation. It is also recommended that you should obtain an Employer identification number through an online portal as it is one of the fastest ways to get one. It is one of the important things that you must have as it will allow you to hire employees and perform certain financial tasks.

Cost To Form Delaware LLC

As you might know that there are various taxes that you should file for creating anything. In the same way, you have to file for different taxes so that you can create your LLC legally and officially. Before you go on further filings you must know that what are the cost incurred in the process of creating an LLC. So, below is a chart that gives an idea about Delaware LLC cost.

Services
Fees
Delaware Registered Agent
Starting from $45
Delaware LLC Name Search
Free
LLC Name Reservation Fee
$75 online/paper filings
Delaware Domestic Filing
$90
Delaware Foreign Filing
$200

The estimated cost for a domestic Delaware LLC would be between $135 – $210. Whereas if you are forming a foreign Delware LLC, it would cost you between $245 – $320.

 

Delaware LLC Important Details
The Form
Delaware Certificate of Formation
Agency
Delaware Division of Corporation
The Filing Fee
$90
Online Filing
Yes
Expedite Option
Yes
State Income Tax
2.2% to 6.95%

Delaware LLC After Filing Process

Here you will find the process that you have to finish when you have registered the Delaware LLC successfully. As you might be familiar with licenses and permits you will need to acquire that to operate the business legally. You have to pay the taxes as per the federal and state laws. Everything is mentioned in detail have a look.

Delaware Licenses and Permits:

To operate the Delaware LLC you need to comply with all the rules and regulations of the state and federal laws. As this might vary from state to state so you need to obtain all the necessary licenses and permits. According to your business nature allows you.

  • If you want to learn more about federal laws then you can visit the U.S. Small Business administration.
  • If you are willing to know more about the state laws then you can visit the State of Delaware Business One-stop.

Delarware LLC Taxes

If you registered the LLC then you will have to pay the taxes as per your income status. To register you will have to file some of the documents that are mentioned below have a look. To operate the LLC successfully you need to pay all the taxes from time to time.

Sales Taxes: Delaware state is one of the Five states which does not apply tax on goods and services. None of the products that are sold in Delaware collects tax from the customers. 

Employer Taxes in Delaware: If you already have an employee in your Delaware LLC then you will have to register your LLC for Unemployment Insurance Tax. If you are deducting the tax of the employee from the salary then you must also register the Employee Withholding tax. To perform this task you can visit the official website of the Delaware Division of Revenue.

Federal Requirements: As I mentioned earlier that you will have to provide income proof to the Internal Revenue Service. To complete that task you will have to register. To complete the task you will have to visit the official website of IRs and submit the forms accordingly.

  • If the formed Delaware LLC is operated by multiple members then you will have to file the 1065 Partnership Return Form.
  • If the formed LLC is operated and managed by a single member then you will have to file the 1040 Schedule C Form.

Hiring Employees

As you know that many of the companies hire employees so that they can contribute their knowledge. There are certain things that you should keep in mind at the time of hiring employees for your firm. You can not select anyone as an employee of the firm, so you have to comply with certain rules that are provided by the government to hire an employee. These rules vary from state to state as they have different criteria.

  • You must verify that they are liable or allowed to work in the US or not.
  • You have to report the new employees as “new hires” to the state.
  • Print compliance posters and place them in visible areas of your workspace.
  • Withhold employee taxes. Use the described method.
  • Worker’s compensation insurance must be provided by you to the employees.

Avoid Automatic Dissolution

There are many circumstances that the government may dissolve your LLC automatically. If you won’t pay any of the tax properly and won’t follow the rules and regulations provided by the government then they have the right to dissolve it. So, for this, you can hire a professional registered agent so that they can do all the things properly. This registered agent will comply with all the rules and regulations provided by the government and they can solve things as they are highly trained regarding each situation.

Tip – Separate Your Personal and Business Assets

This is one of the most important things that you should consider. It is that you have to separate all your business and personal assets when you create an LLC. Whenever you use both together then your assets are at the highest risk when the LLC is sued. You have to follow the following things to separate your personal and business assets to prevent your assets.

  1. Open a bank account for your business
  2. Get a credit card for your business

 

Delaware Foreign LLC Registration

As most of you might be familiar with the Foreign and Domestic LLC. If you have registered as a foreign LLC then you will have the benefits to expand & grow your business in multiple states. I recommend you to register as a foreign Delaware LLC. You have to fill out the form for your foreign LLC then you have to attach all the required document and send it to the below address. You must pay the fees through a check or money order to the secretary of the state and attach it along with the documents and form. To complete the process you have only one option that you mail all the documents to their mail address.

Mail to:

  • Delaware Division of Corporations
    401 Federal Street
    Suite 4
    Dover, DE 19901

How to Obtain a Certificate of Good Standing

The certificate of good standing ensures that the Delaware LLC is formed legally and is maintained properly. there are several names for the Certificate of Good standing in various states. Yes, the Certificate is also known as the Certificate of Status in Delaware. This certificate can also be needed in many situations.

  • If you want to make improvements in your LLC and you looking for funds then you must have the Certificate of Status.
  • If you are willing to form a new LLC in a different state then also you will need the Certificate of Status.
  • At the time of renewal of license and permits, you will have to provide the Certificate of Status.

To obtain the Certificate of Status you will have to mail them to the Delaware Division of Corporations. Provide all the needed information including $50 fees for short-form & $175 for long-form. Once you have submitted the documents you will receive the Certificate of Status of your Delaware LLC within a few days.

Mail to:

  • Division of Corporations
    401 Federal Street
    Suite 4
    Dover, DE 19901

How to Dissolve an LLC in Delaware

It is equally important to know regarding the dissolution process for the dissolution of your LLC. In the future, it might happen that due to some circumstance all the members of LLC decide to dissolve the firm. You cannot dissolve it anyhow, you have to follow a procedure then only you would be able to dissolve the firm legally. If you won’t dissolve the LLC legally then you might have to pay penalties and taxes for that. So, for more information, you have to read the guide for the dissolution of Delaware LLC. These are the two things that you might consider for dissolving your LLC in Delaware.

  • To close your business tax accounts
  • To file the articles of dissolution

Frequently Asked Questions

1. How much does it cost to form an LLC in Delaware?

If you want to register an LLC in Delaware then you will have to pay $90 for registration. Additionally, you will have to pay for filing other documents.

2. How long it takes to receive the confirmation of LLC in Delaware?

Once you submit all the documents including the fees you will have to wait for 2 weeks for your confirmation.

3. Can you select yourself as a registered agent in Delaware state?

Yes, you can select yourself as a registered agent instead of hiring a registered agent.

4. Is the Operating agreement is necessary to document in Delaware State?

No, an operating agreement is not a necessary document if you want to register your Delaware LLC. You can save it for future use, as it back you up and your LLC.